It continues to be the growth investor's time to shine. With the All Ordinaries Index (Index: ^AXAO) (ASX: XAO) knocking on the door of its all-time high, well, to paraphrase a beloved Christmas movie … "growth is all around us".
Growth investing involves identifying a catalyst or trend, jumping in as early as possible and riding the stock price up as high as you can. This week, we're talking WAAAX – here are two ASX growth stocks that are very good at giving investors waves to ride on.
AfterPay Touch Group Ltd (ASX: APT)
Ahh, Afterpay. The share price of everyone's favourite growth stock spectacularly rebounded last week after the dramatic fall the week before that. Afterpay shares started last week around the $20.20 mark but have risen strongly over the last 5 days and opened higher still this morning. Afterpay is up almost 23% since last Monday alone (now that's a wave worth riding).
Afterpay has had a very interesting two weeks – with AUSTRAC deciding to audit the company over money-laundering concerns, Afterpay issuing a $300 million capital raise and news that its founders have unloaded a massive swathe of shares – it's been a fast and furious ride for investors. However, all this soon might be yesterday's news with Afterpay's conquering of the US market steaming ahead and its impending UK launch. I still think there's room for this wave to rise further.
Xero Limited (ASX: XRO)
With its WAAAX cousin Afterpay hogging the headlines, the Xero share price has (incredibly) not done too much over the past month. Saying this, Xero is still up 46% YTD, so it's not a sleepy blue chip just yet. I'm actually a lot more bullish about Xero going forward. The company is only just starting to turn a profit, but the nature of its software-as-a-service platform (with a fixed monthly fee) means that the more customers it attracts, the more that its profits snowball exponentially over time. You only have to look at how Netflix has done over on the NASDAQ during the past decade to see how powerful this can be. If Xero continues to add subscribers at current rates, this company's wave could tower very high indeed.
Foolish Takeaway
Of course, these share prices are already reaching speculative levels, so if you do want to hop on these waves, be prepared for a big drop if they crash. But as anyone who's into growth investing would know, that's just part of the fun!